Kamis, 21 Juli 2011

Coal update – South Africa impact by Jayden Vantarakis - CLSA

Coal analyst Jayden points out news that the president of the ANC Youth League, Julius Malema is pushing South Africa to nationalize its natural resources, including its sizeable coal mining industry.

Why is this important?

The ANC Youth League has in the past been a strong platform to the highest political office in South Africa.
Other resource-rich countries that have gone down the path to nationalization have resulted in banning and/or disruption of exports.
Large coal miners with presence in South Africa include BHP, Anglo American and Sassol
South African thermal coal price moves in line with Newcastle thermal coal prices
Potential nationalization is likely to introduce uncertainty in the supply chain
Why does it impact Indonesia?

India has been South Africa’s largest customer. South African nationalization concerns could make Indian power utilities look to Indonesia for incremental supply.
Adaro (ADRO IJ) and Indika (INDY IJ) have the most leverage to Indian coal assumption because of their lower coal energy content.